The Turnbull Government and negative gearing: Misleading the House?

The Turnbull Government deliberately misled Parliament on Labor's negative gearing policy, but few in the Press Gallery asked the hard questions, writes Professor Jane Goodall.

“MISLEADING THE HOUSE” is one of the most serious allegations a politician can face.

But given that misleading statements are routine fare in Parliament, it’s not a charge that can easily be made to stick.

Revelations about the Turnbull Government’s deliberate misrepresentation of the impact of Labor policy on negative gearing are a case in point.

Treasury briefing documents obtained by ABC reporters under Freedom of Information laws provide hard evidence that Prime Minister Malcolm Turnbull and Treasurer Scott Morrison engaged in a scare campaign that was knowingly in contradiction of findings based on Treasury modelling.

Is the requirement for "serious explaining" the worst thing that can be faced by a Parliamentary leader who has been shown to have deliberately, explicitly and persistently misled the public? Apparently so. In the political sphere, there is lying and lying, and our representatives in Parliament are savvy enough to employ all manner of fudging strategies to avoid any explicit breach of the rulings on privilege and contempt.

The problem is that those strategies can be so much worse than outright lies. A trawl back through Hansard provides some stark insights into how the game is played.

They have on the Labor benches the Member for Fraser, a distinguished former professor of economics [Turnbull was referring to Andrew Leigh], and he was asked today on Sky News about negative gearing ... Kieran Gilbert, anxious to reassure the rather confused professor, said, "Have you done economic modelling to suggest that existing house prices won't fall as a result of your policy?" — a straight, simple question.

Hands on hips and grinning from ear to ear, Turnbull was confident he had a point scorer with that little narrative. But bear in mind that even as he was saying this, he knew there was indeed modelling, done by those in Treasury who are paid and resourced to do it on behalf of Government — and provided to his Treasurer Scott Morrison early in 2016. That modelling answered his straight and simple question for him: removing the tax concessions on negative gearing in line with Labor’s policy would have only a "small" and temporary impact on house prices.

Their reckless policy on negative gearing is absolutely calculated to put the skids under property prices. There is no point in Labor pretending it is not going to have an impact. The professor of economics himself, today, in that same Sky interview, did concede it would cause prices to moderate.

Leigh’s comment, as it transpires, was quite accurate, and Labor’s “pretence” was a well-founded premise.

Over the next few days, Turnbull continued to goad the Opposition over their failure to produce any modelling and continued to inflate the rhetoric, throwing numbers into the air. Growth in the property market had cooled to 2.3%, he said, a figure barely above inflation. At this point of vulnerability, the Labor Party tax changes would “take more than one-third of demand out of the ring.”

One third? Where did the Prime Minister get that number from? Where was his modelling? No matter.

“You do not need to be a professor of economics to know that that is going to crash housing prices. Of course it will.”

At this point, Turnbull’s approval ratings were at 69% and the Coalition was leading Labor in the opinion polls 57% to 43%. How might those ratings have looked if the public had been aware of the way in which their own perceptions of a key policy area were being manipulated?

Perhaps we have become so accustomed to manipulation in political debate it would hardly have mattered. Perhaps the majority of the public are sufficiently cynical to assume that the goal of any leading political figure is to control the story, regardless of its relationship to reality as most of us live it.

But something more than the routine game of story making was going on here. Turnbull’s fans in the Press Gallery were evidently enjoying the display, regularly alluding to his "brilliance" in their reports. Few of them were asking the hard questions. This was a sustained performance, given with the total confidence (to use one of Turnbull’s favourite words) of someone who knows he will not be called out on it.